The Equality Act is bankrupting Britain

Would you rather work in a warehouse or behind a supermarket checkout? One involves shifting pallets and driving forklifts in a cold and noisy building, usually during unsociable hours; the other involves stacking shelves and scanning products, mostly during the day. One carries the risk of back injuries; the other carries the risk of having your ear chewed off by a fussy customer. All things being equal, working at the checkout seems like it’d give you a far easier life.

Yet according to a recent employment-tribunal ruling, there is apparently nothing to distinguish between these two roles. In January, more than 60,000 employees – mostly women – won the latest stage in a decade-long equal-pay case against supermarket giant Asda. The crux of their claim is that the female Asda employees working in retail roles are being underpaid, compared with Asda’s mostly male warehouse workers. Of the 14 women acting as claimants on behalf of thousands of Asda employees, only two were found to not be doing work of ‘equal value’ to their warehouse counterparts. Now, Asda must argue that there is a reason unrelated to sex that these roles are paid differently.

You might think the reason for this pay gap is simple enough: the two jobs are not the same. Not even remotely. Yes, both roles have plenty of unpleasant aspects. But on the whole, warehouse work is far less appealing, which you might then expect to be reflected in the wages it pays.

Not so, according to the employment tribunal, which cited the Equality Act 2010. Its judgment ends with what is presumably supposed to be a compelling and emotive comparison between a shop worker and warehouse worker as they end their respective days. ‘Ms Hutcheson took off her high-visibility jacket at the end of a week’s work. So did Mr Ballard, at the other end of the country… Unknown to them, they had been doing work of equal value.’ By that logic, is the work of a police officer and a Deliveroo driver of equal value, because they both wear helmets?

Appeals to reason carry little weight where equal-pay disputes are concerned. Last year, more than 3,500 current and former employees of Next won a similar legal battle. An employment tribunal found that shop staff, who are predominantly women, should not have been paid less than the company’s warehouse workers, who are mostly male.

In this case, the tribunal rejected the claim that the pay gap was a result of ‘direct discrimination’. This would have been a tough argument to make, given that when the case was heard, males were only a slim majority among the warehouse staff (48 per cent were female). Instead, the tribunal accused Next of paying different wages in order to ‘reduce cost and enhance profit’ (which is what most of us would expect a business to do, rather than a form of discrimination). Next tried to argue that it simply paid its workers in line with market rates, but the tribunal rejected this argument. It ruled that the roles are of equal value, and therefore must be paid equally.

The tribunal didn’t even seem to care that the shop-floor staff themselves acknowledged that the warehouse would be a much worse environment to work in. Next had previously tried to make up for shortages in warehouse staff by offering retail workers the chance to switch over to the warehouse. One of the plaintiffs in the case admitted that she turned this offer down, because the job ‘did not seem particularly attractive’, due to the ‘vibration, alarm sirens and the screeching of machinery, wheels and rollers continuously present in all areas’. Without a hint of irony, she said that she would only have taken the warehouse job if it paid ‘a lot more money’.

Next is now liable to pay over £30million in compensation to affected employees. Similar cases are expected to be brought against the likes of Tesco, Sainsbury’s, Morrisons and Co-op. All in all, compensation for equal-value claims could cost the retail industry somewhere around £8 billion.

Of course, few will shed a tear for the bottom lines of major retailers, but equal-value claims are also being made – and won – against the public sector, with devastating consequences. In 2012, 174 employees of Birmingham City Council sued the city under the Equality Act for what they claimed was discriminatory pay. The Supreme Court determined that the council had been underpaying staff in female-dominated positions, such as cleaners and teaching assistants, in comparison with male-dominated roles like bin men and street cleaners. Since 2012, the council has paid out more than £1 billion in equal-pay claims to thousands of mostly female employees. As of 2023, the council claimed that it still faced a bill of up to £760million. It then effectively declared bankruptcy and cut all non-essential spending.

Similar pay disputes in Glasgow City Council and Coventry City Council have forced councils to sell off property and slash vital services. According to The Times, six more local authorities are expected to pay out this year, potentially pushing more town halls into bankruptcy. They are being asked to shell out billions they don’t have to compensate for discrimination that never even took place.

That these claims are being even entertained, let alone actually winning in court, is sheer lunacy. Of course being a teaching assistant or shelf stacker is tough and at times unpleasant. But there is a perfectly logical reason why these roles are paid less than bin men or warehouse workers. And it has nothing to do with sex discrimination or women’s work being undervalued. It is simply that fewer people want to work as bin men or warehouse workers. The higher pay is necessary to coax people into these jobs.

No one should begrudge a pay rise to the women working at Asda’s checkouts, on the shopfloor of Next or as teaching assistants in Birmingham’s schools. But the way to achieve better pay is through economic growth, better employment rights and perhaps collective bargaining too, so that wages can rise sustainably across the board. Letting judges decide who gets paid what, based purely on which group can make the most compelling claim to have a grievance, is a recipe for economic ruin. The more wages come to be divorced from real-world financial considerations, from a firm’s revenue or a local authority’s tax intake, the more companies and councils we can expect to go bankrupt, with terrible consequences for wider society.

In years gone by, it was certainly true that in many professions, women would be paid less than their male counterparts for doing exactly the same job – if they were even considered in the first place. Roles were even advertised with men’s and women’s wages. But like so much of the sexism that blighted life in and before the 20th century, the so-called gender pay gap has been consigned to history. Talk of a ‘gender pay gap’ today is a fiction maintained by professional feminists and activist lawyers, and now given legal heft by the Equality Act. In the absence of actual pay discrimination on a noteworthy scale, victimhood is being sought out where it doesn’t exist. Hence the nonsense that wildly different jobs are of ‘equal value’.

Sustaining the myth of the gender-pay gap is putting Britain on the path to bankruptcy.

Lauren Smith is a staff writer at spiked.